SALOMON V SALOMON CO. LTD.

Salomon V Salomon Co. Ltd.



Salomon V Salomon Co. Ltd.

Introduction

As with any other object, people symbolize companies all along a number of extents. But what are the key psychological magnitudes that best explain companies, organizations, or brands? The main dimensions that psychologically distinguish companies bear a resemblance to human factors of personality and can be labeled Honesty, Prestige, Innovation, and Power. These dimensions are established after a time gap years, also capturing specific changes in the rating of individual companies. Landmark UK company law case 'Salomon v Salomon & Co. Ltd.” is a law which sets the basis for the law cases (James 2007, pp 202). In this coursework we will discuss the basic characteristics of the company through which we will apply the Company Act 2006 to understand the law case of that time. The concept of limited liability in the light of Salomon v Salomon & Co. Ltd is also elaborated. The reasons for lifting the corporate veil with its good and bad effects is also came into consideration in this coursework.

Discussion

The century old decision by the House of Lords in the Salomon v A Salomon & Co. Ltd. case is probably the most cited company law case in the jurisdictions of the Commonwealth. The case is credited with having articulated the founding propositions of company law, and it is accordingly treated by judges and academics alike with a reverence bordering on the religious (Paul 2008, pp. 1101). In the decades since their Lordships' speeches, however, company law has been the subject of both continual and fundamental change.

All Commonwealth jurisdictions have undertaken significant revisions of their company's legislation and in many cases more than once. In the United Kingdom in recent times this has been spurred on by the challenges and demands of European integration; while in Australia and New Zealand, for so long content largely to adopt English law, there has been a trend towards increasingly distinct and independent approaches to company's legislation (Vanessa 2009, pp. 918). In Australia, the corporations Law represent an all-embracing, black-letter approach, while the recent New Zealand reforms reflect a more open-textured approach.

Characteristics of the company

Company is a separate legal entity, distinct from its members and controllers:

The companies act 1862 (UK) that was in force at the time required seven subscribers to the memorandum of association (equivalent to a company constitution) and his wife and each of their five grown-up children purchased one share each. Salomon and his two eldest sons appointed directors. Salomon controlled the running of the company as a result of an agreement between them that all the other shareholders would nominees, i.e., they would vote at meetings in accordance with the wishes of Salomon (Thomas 2009, pp. 352). The company paid Salomon part of the purchase price for the business immediately on transfer of his business to the company by issuing shares in the company. It also agreed to pay him the remainder of the price over ...